Cramer calls this inventory market “essentially the most speculative” he has ever seen

Jim Cramer

Scott Mlyn | CNBC

CNBC’s Jim Cramer said Tuesday that some of the stock gains in the market were “insane” as investors recently bought certain names from Tesla to Royal Caribbean without regard to the basics or state of the coronavirus pandemic and sticking to it.

“Where are the profit takers” higher after these dizzying moves? asked the Mad Money host.

Describing the current environment as “the most speculative market I have ever seen,” Cramer encountered a hot topic where he was stunned by the movements of so-called Robinhood stocks, with names engulfed on the online trading platform of choice by the younger Investors.

“You can’t lose in this market,” he said, adding, “it’s like a slot machine” that always pays off. “I haven’t seen this in my career,” said Cramer, who joined Wall Street in the mid-1980s after joining Goldman Sachs and later became a hedge fund manager before becoming a financial journalist.

Questioned how this type of buying can continue, Cramer noted that such speculation has seen a major sell-off in the past. He noted, however, that such a downturn has not yet occurred, despite coronavirus cases in the U.S. and around the world recording record after record, which could jeopardize the emerging economic recovery from the depths of the spring pandemic.

In the case of Tesla, Cramer called it a technology company, not just an automaker. He said Tesla’s profit of more than 500% this year alone couldn’t be justified otherwise.

Cramer has been a fan of Tesla for a while and even bought one of the electric vehicles. “Those are ridiculous” moves, he said, but added it wasn’t 1999, referring to the dot-com bubble that later burst. “Investors like Tesla,” he argued. The sharp move in Tesla shares on Tuesday brought the company to a market value of $ 500 billion.

The Dow Jones Industrial Average opened 300 points higher on Tuesday, with the Trump administration approving Joe Biden’s transition and the president-elect to select former Federal Reserve Chair Janet Yellen as Treasury Secretary. A day earlier, the Dow rose 327 points after AstraZeneca and Oxford said their Covid-19 vaccine was up to 90% effective for a third Monday in a row, to encourage encouraging trial data.

Tuesday’s trading included so-called reopening stocks like airlines and cruise lines that received another boost. Tech stocks – benefiting from the pandemic stay-at-home economy that would wane in a post-vaccination world – remained stable after a tough Monday that hurt the Nasdaq’s earnings.

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